With all the focus on unemployment, the usual recession victims have been overlooked a bit. The over-65 crowd, living on fixed incomes, has seen portfolios decimated and those consistent dividends from blue chippers evaporate. At the same time, medical costs are headed in the other direction. Expenses up and income down, seniors have found only one solution: credit cards.
Low- and middle-income consumers who've reached or passed age 65 had $10,235 in credit card debt, on average, last year, up a disturbing 26% from 2005. Meanwhile, credit card debt climbed only 3% across all age groups – to $9,827. From the fourth quarter of last year to the first this year, total revolving debt fell a modest 2.3% to $939.6 billion.
So, where's the money going? For the older set, credit card-fueled spending is increasingly going to necessities rather than luxuries – essentially, credit cards are becoming a last resort. More than half of those surveyed suggest that medical expenses have contributed to their mounting credit card debt.
And, it gets worse.
The older folks are spending more for access to credit. Almost one in four households is paying interest of above 20%. Among the households charged late fees, the average fees paid per month was four.
From 1992 through 2007, the latest data available
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